Commercial trade and finance is complex, expensive, and paper-intensive. Both buyers and vendors are required to prepare, exchange, and process numerous commercial and financial documents associated with each transaction. High-volume exporters and importers, for example, are particularly faced with overwhelming paperwork, expense, and administrative challenges.
Presently, commercial trade transactions involve a rudimentary yet error-prone process. Assume, for example, that a buyer located in the United States wants to purchase goods from a vendor in the Philippines. To initiate the transaction, the buyer will customarily prepare and submit to the vendor a purchase order containing information such as the items or products desired, the quantity, and other relevant details, such as expected delivery date and location, for example. The buyer may also include financing documents, such as a letter of credit, for example, which may be prepared by the buyer's bank and help to speed up the order. A letter of credit is a binding document that a buyer can request from his bank in order to guarantee that the payment for goods will be transferred to the vendor. Basically, a letter of credit gives the vendor reassurance that he will receive the payment for the goods. In order for the payment to occur, the vendor has to present the bank with the necessary shipping documents confirming the delivery of goods within a given time frame. Letters of credit are often used in international trade to eliminate risks such as unfamiliarity with the foreign country, customs, or political instability. Letter of credit processing may also require compliance with third party requirements, such as customs or other like governmental entities.
Upon receiving the purchase order and financing documents from the buyer, the vendor will deliver a request for payment (or invoice) to the buyer along with shipping documents detailing delivery date and location, for example. The buyer reviews these documents for accuracy and completeness and arranges for or authorizes payment, usually through its bank. The exchange of documents between buyers and vendors is commonly done through standard mail delivery systems, such as government mail services and private express delivery services, for example. More sophisticated buyers and vendors may use more immediate forms of communication, such as the Internet and other forms of electronic communication, such as, for example, the various systems and methods described in the Related Systems and Methods.
Though existing electronic systems and methods—including the Related Systems and Methods—are capable of, among other things, electronically processing and generating purchase orders and invoices, and arranging financing and payment, there is a need for systems and methods that simplify and enhance the processing of letters of credit and the settlement or assurance of a trade transaction in an efficient and reliable manner. In particular, there is a need for systems and methods that utilize supply chain event data (e.g., the condition or location of a good or product throughout the supply chain) to modify or adjust terms and requirements of the trade (e.g., payment or other terms within a letter of credit), and/or to effect settlement or assurance of the trade transaction in a more granular or real-time manner.
These and other problems exist.